Responses to TAPBI Performance Audit Report

Ade, Az Sbcs, And Sbe

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State of Arizona Department of Education Tom Horne Superintendent of Public Instruction October 24, 2007 Ms. Debra K. Davenport, CPA Auditor General Office of the Auditor General th2910 North 44 Street, Suite 410 Phoenix, Arizona 85010 Dear Ms. Davenport: The Arizona Department of Education is providing the enclosed response to the Auditor General’s performance audit of the Technology Assisted Project-Based Instruction Program. We appreciate your work on this performance audit, your consideration of our previous comments and suggestions and your acknowledgement of the quality and variety of work already provided by the Arizona Department of Education. Please feel free to cal me at [phone] if any additional information is needed. Sincerely, Margaret Garcia Dugan Deputy Superintendent Enclosure ƒƒƒƒ State of Arizona Department of Education Tom Horne Superintendent of Public Instruction ADE GENERAL COMMENT Before SAIS, schools were paid on the basis of the aggregate number of students that were reported by those schools. The State had no way to verify numbers and was unable to deduct for concurrent enrollment. SAIS was first implemented in 2003 to the point where payment could be made on the State’s records rather than on the schools’ self-reported records. For the first time, it was possible to deduct for concurrent enrollments. SAIS has numerous other advantages over the ...

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  State of Arizona Department of Education

        Tom Horne Superintendent of Public Instruction   October 24, 2007   Ms. Debra K. Davenport, CPA Auditor General Office of the Auditor General 2910 North 44 th Street, Suite 410 Phoenix, Arizona 85010   Dear Ms. Davenport:   The Arizona Department of Education is providing the enclosed response to the Auditor General’s performance audit of the Technology Assisted Project-Based Instruction Program.   We appreciate your work on this performance audit, your consideration of our previous comments and suggestions and your acknowledgement of the quality and variety of work already provided by the Arizona Department of Education.   Please feel free to cal me at [phone] if any additional information is needed.   Sincerely,       Margaret Garcia Dugan Deputy Superintendent   Enclosure

     

  State of Arizona Department of Education

  Tom Horne Superintendent of Public Instruction       ADE GENERAL COMMENT   Before SAIS, schools were paid on the basis of the aggregate number of students that were reported by those schools. The State had no way to verify numbers and was unable to deduct for concurrent enrollment.   SAIS was first implemented in 2003 to the point where payment could be made on the State’s records rather than on the schools’ self-reported records. For the first time, it was possible to deduct for concurrent enrollments. SAIS has numerous other advantages over the previous system. These include, but are not limited to the following:   ƒ   SAIS allows verification that the required number of instructional days is being met. ƒ   SAIS allows for exclusion of students over the age of 22. ƒ   SAIS allows for more accurate and consistently calculated graduation rates and related cohort year information.   SAIS allows for more detailed audits, saving the State many millions of dollars. ƒ   The deductions for concurrencies have not been perfect. Still, the current situation is a vast improvement over the situation before SAIS, where payment was made on self-reported numbers by schools. Imperfections are caused in part by the need to make adjustments for changes in legislation. Further, the consequences of change can increase over time, as new programs grow. These all require further improvements to SAIS to catch all concurrencies. We have given this the highest priority and will correct the problems described in the Auditor General’s report.   Arizona began developing its automated student data collection system in 1997, before TAPBI legislation existed. The system’s design was based on business rules reflecting previous administrations’ views on school funding. The system was named the Student Accountability Information System, or SAIS. When TAPBI legislation passed in 1998, these previous administrations decided not to incorporate TAPBI into the SAIS system because they determined that the funding rules for TAPBIs were sufficiently different from regular schools. Since TAPBI schools still needed a way to report student data to the state, ADE created a separate web-based student data entry system for TAPBI schools.   In late 2005, recognizing that student populations in TAPBI were growing and concurrency (multiple enrollment) was becoming an issue, ADE began manual checks of TAPBI data. Those

manual checks enabled ADE to deduct concurrencies from TAPBI schools. However, for technical reasons, this couldn’t be done for district schools. Since SAIS’s fundamental design excluded TAPBIs, SAIS could not be readily adapted for TAPBI concurrency validation.   Because of TAPBI issues and other SAIS shortcomings, ADE determined last year that a comprehensive rewrite of SAIS programming was needed, rather than attempting a “Rube Goldberg” approach that would “band-aid” eachproblem as it arose. In fact, in the private sector, a ten-year-old major system like SAIS would normally be re-written due to changing system requirements and the evolution of technology. Short-term patchwork repairs are time consuming and expensive. These types of quick fixes can also impact data integrity, because of the myriad of data linkages that determine how state aid is distributed.   Last year ADE requested $1.036 million, including 13 staff, in a Decision Package that would have allowed, among other things, the SAIS rewrite to begin. This was not granted. The Department is not complaining, and understands legislative priorities. However, this resulted in the necessity to triage competing SAIS priorities such as security, AIMS accuracy, school achievement profiles, teacher certification changes, No Child Left Behind requirements, federal requirements such as EDEN and EdFacts, legislative changes, audit support, legal support, school Safety, data pulls for open records law requests, etc.   ADE has now made addressing TAPBI concurrencies its highest SAIS priority. This reprioritization will mirror ADE’s swift response to security-related recommendations made in the 2006 performance audit on Information Management. ADE information technology management focused staff resources on making security-related upgrades to fully protect all sensitive information entrusted to ADE.   Even giving the TAPBI concurrency issue the highest priority, implementing these changes will take six months. The implementation phase will give the Legislature time to consider whether it wishes to revise applicable statutes prior to the implementation date. Eliminating TAPBI concurrencies utilizing the patchwork approach will have a negative impact on the monthly window of time schools have to submit their student data to the department. In order to meet the statutory payment deadline, the department will have to reduce the schools’ timeframe for submitting data by as much as a full week. A comprehensive rewrite of SAIS would address this.   ADE COMMENTS REGARDING CHAPTER 1: PAGES 13 -19   Chapter 1, Recommendation 2   To ensure that TAPBI ADM is properly calculated and funded, ADE should:   a.   Ensure that SAIS is programmed to identify and calculate necessary funding adjustments for TAPBI concurrent enrollments and summer school programs. b.   Make appropriate adjustments to TAPBI funding for the fiscal year 2006 ADM calculation errors and any similar errors made in fiscal year 2007. c.   Monitor whether TAPBI schools adhere to statutory enrollment limitations, including the requirements that 80 percent of new students must have been previously enrolled in a

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public school, that kindergarten students must have a sibling enrolled in the program, and that enrollment growth must not exceed 100 percent in a year for individual TAPBI schools.   ADE Response   The finding of the Auditor General is agreed to and the audit recommendation will be implemented.   a.   ADE will program SAIS to address TAPBI funding adjustments. To accomplish this, ADE will re-prioritize existing IT resources to address these additional TAPBI programming requirements. ADE may again seek legislative support for additional resources to address TAPBI and other SAIS concerns. Last year’s budget request for additional SAIS support was not approved.           b.   In the short-term, ADE will implement procedures that will address TAPBI funding adjustments for fiscal years 2006 and 2007. ADE expects to complete development of these procedures by April, 2008. Once developed, ADE will calculate and make the funding adjustments to the LEA’s affected. ADE will notify the districts and schools affected, and will make the funding adjustments based on statutory guidelines.   c.   ADE’s Information Technology Unit has developed SAIS programming to monitor both the 80 percent rule and the kindergarten sibling rule. ADE is in the process of implementing these programming changes. In addition, ADE will develop guidelines for TAPBI schools’ data submission so that the ADE Audit Unit can verify compliance with these requirements.   ADE disagrees with the Auditor General’s report regarding two schools exceeding the TAPBI enrollment limits for these two schools. In a response to ADE’s questions regarding Senate Bill 1422, 1 st Regular Session, 2005, the Attorney General stated that 1) Fiscal Year 2006 should be used as the base year for calculating subsequent 100 percent growth limitations; and 2) that the Superintendent of Public Instruction has the authority to establish and set the allowable cap for districts. ADE assigned a 450 student allowable cap enrollment for both the Peoria Unified School District and the Tucson Unified School District, and neither exceeded the allowable cap enrollment.             Chapter 1, Recommendation 3   ADE should seek legal advice to determine if the over-funding related to non-compliance with these enrollment limitations should be recovered from the TAPBI schools.   ADE Response   The finding of the Auditor General is agreed and the audit recommendation will be implemented.  

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ADE will seek an Attorney General opinion to help determine whether over funding related to non-compliance with enrollment limitations should be recovered from TAPBI schools. However, as indicated in our response to Chapter 1, Recommendation 2.C., ADE did not over fund the schools listed in the report.      Chapter 1, Recommendation 4   ADE should determine whether to recover TAPBI funding paid to the Humanities and Sciences Academy Arizona for fiscal years 2006 and 2007 that was not based on student logs of actual instruction time.   ADE Response   The finding of the Auditor General is agreed and the audit recommendation will be implemented.   ADE will audit Humanities and Sciences Academy Arizona to determine whether to recover TAPBI funding for fiscal years 2006 and 2007.   ADE COMMENTS REGARDING CHAPTER 2: PAGES 21 - 28   Chapter 2, Recommendation 1.b   To ensure compliance with statutory reporting requirements and to improve the accuracy of costs, the following actions should be considered:   b.   To facilitate this cost accounting, the Auditor General’s Office and ADE should add a specific TAPBI program code to the Charts of Accounts provided in the Uniform Systems of Financial Records for Arizona School Districts and for Charter Schools.   ADE Response   The finding of the Auditor General is agreed to and the audit recommendation will be implemented.   ADE will work with the Auditor General’s Office to add specific TAPBI program codes to the Charts of Accounts provided in the Uniform Systems of Financial Records for Arizona School Districts and for Charter Schools.   ADE COMMENTS REGARDING CHAPTER 3: PAGES 29 – 39   Chapter 3, Recommendation 3   ADE should ensure that TAPBI courses provide students with at least the minimum instruction hours required by statute.    

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ADE Response   The finding of the Auditor General is agreed to and the audit recommendation will be implemented.   Currently, ADE is distributing Basic State Aid to TAPBI schools based on reported instructional hours. Thus, for example, if a high school student is attending less than 720 hours per year, the TAPBI school receives reduced funding based on statutory requirements.       ADE will request an Attorney General opinion as to whether the instructional hours mandated in the statutes also apply to TAPBI schools.   Chapter 3, Recommendation 4   ADE should determine whether Arizona Distance Learning and Pinnacle Education Virtual Academy have sufficient student enrollment records to demonstrate compliance with statutory minimum instruction hour requirements.   ADE Response   The finding of the Auditor General is agreed to and the audit recommendation will be implemented   ADE will audit the Arizona Distance Learning and Pinnacle Education Virtual Academy to determine whether they have sufficient student enrollment records to demonstrate compliance with attendance reporting requirements for funding .  If it is deemed that statutorily-mandated instructional hours are education-based, then ADE will audit the entity to determine compliance.            

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